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Houston Chronicle
7/16/2006

Since the Texas Health and Human Services Commission approved an $899 million contract with a consortium led by Bermuda-based Accenture, very little has gone right. The people who've paid for the blunders are the state's poor, particularly children and the elderly.

Since the state instituted the privatization effort, enrollment and reinstatement rates in the Children's Health Insurance Program have slumped; hundreds of persons have erroneously been denied Medicaid and food stamp eligibility; and applications were mistakenly directed to a Seattle warehouse. Planned layoffs of state caseworkers, which were supposed to result in big savings, were canceled as overwhelmed call centers were forced to return thousands of cases to state employees.

Now 60 Texas state representatives, including eight from Houston, have signed a letter to Health and Human Services Commissioner Albert Hawkins calling for the Texas Access Alliance headed by Accenture to pay the ultimate price by having the contract revoked. The missive, written by Rep. Patrick Haggerty, R-El Paso, asks Hawkins "to cancel the contract with Accenture for nonperformance and commit the remaining resources to rebuilding the human services eligibility system that, as little as two years ago, was among the best in the country."

A group of 30 Republican legislators, including some in the leadership team of House Speaker Tom Craddick, earlier sent out their own letter supporting Accenture. Craddick has defended the contractor in comments to the Houston Chronicle editorial board and Gov. Rick Perry also opposes canceling the contract. So far more than $90 million has been paid to the group.
Commissioner Hawkins has said state officials are considering levying penalties against Accenture for its performance.

In attempting to minimize the damage, Hawkins delayed full implementation of the contract and postponed the layoff of state workers for a year. It's now clear that the sweeping privatization plan approved by HHS commissioners has harmed the access of poor Texans to critical safety net services and failed to provide the big savings that were the deal's rationale.

At minimum, HHS officials need to develop much tighter monitoring procedures of the new call centers to guarantee proper handling of applications and eligibility screening. Accenture should be financially penalized for its failure to meet promised service levels and its contract revoked if problems continue.



State cancels $171M Medicaid contract with ACS Lee Weisbecker Triangle Business Journal
7/14/2006

The North Carolina Department of Health and Human Services on Friday canceled its $171 million contract with Texas-based Affiliated Computer Services, ACS, to provide the state with a
new Medicaid claims paying system.

DHHS officials began sending out the notice to terminate after the close of business and couldn't be reached for further comment.

The action follows a dispute between DHHS secretary Carmen Hooker Odom and ACS over costs, staffing levels and delivery schedules in supplying the hardware and software needed to get the new claims system up and running.

The North Carolina Medicaid system currently pays over $8 billion in medical bills for over a million low-income recipients annually.

Outside of large highway projects, the contract is the largest in state government.

In an earlier action, Hooker Odom had given the company, which has set up such processing systems in 31 states, until July 13 to resolve the state's objections, particularly in the area of staffing and contract deliverables.

"ACS has failed to satisfy either of the above requirements for cure,"

Hooker Odom says in her notice terminating the five-year agreement.

She also directs the company to cease all work on the contract, preserve work product related to it and cancel any subcontracts on the job.

In letters on the dispute to various state officials and in a briefing on the issue before a panel of lawmakers at the General Assembly this week, ACS officials called any termination action unjustified and pinned the problems on DHHS' mismanagement over several months.
ACS has also said that termination would result in legal action.

Whatever the outcome of that prospective battle, the state will continue to pay Medicaid claims. Another Texas-based company, Electronic Data Systems, EDS which operated the system for 25 years before losing a contract rebid to ACS in 2004, has continued to pay claims while the new system was being put in place.

EDS will carry on with that function until DHHS rebids the contract.

Triangle Business Journal reported in its June 30 issue that state information technology chief George Bakolia had issued an ultimatum to Hooker-Odon to resolve the ACS contract or he would suspend approval for it.